JPMorgan Chase & Co. plans to expand its use of distributed grid computing for high-powered analytic applications, and has turned to its longtime technology partner Sun Microsystems Inc. for the systems and design expertise.
Sun, which announced the agreement Thursday, said the deal calls for the companies to work together on a range of advanced IT projects, including grid computing, data archiving, and virtualized data-center operations.
Executives from both companies said the new arrangement has no connection to the big outsourcing deal with International Business Machines Corp. that JPMorgan Chase scuttled last September after buying Bank One Corp.
Adrian Kunzle, a vice president at JPMorgan and its global co-head of investment bank technology architecture, said cutting-edge computing technologies, such as grids, are "pretty fundamental to bringing more horsepower to our investment banking business."
Grid computing breaks complex processing tasks into many small pieces, distributing the work among numerous workstations across a network. JPMorgan Chase's investment bank has been using grids since 2000 to analyze intricate financial instruments, such as the risks involved in derivatives.
"The instruments that require the most horsepower are the exotic derivatives," Mr. Kunzle said.
Seven of the investment bank's eight individual risk management systems operate on grids now, he said. JPM Chase executives have said that one appealing feature of grid designs is that the user can avoid dedicating specific hardware to individual processing tasks.
Mr. Kunzle said Sun's new Solaris 10 operating system played an important role in JPMorgan Chase's decision to make the deal with Sun.
"Sun wasn't particularly interesting a couple of years ago," he said, but it was thought that Solaris 10 "was worth looking into."
Solaris 10 runs not only on Sun's proprietary Sparc processor designs, but also on conventional PC chips such as Intel Corp.'s Pentium family, and Advanced Micro Devices Inc.'s Opteron chips. Though the Sparc chips are known for their high performance, they are also more expensive than those from Intel and AMD.
"We are looking to minimize our capital outlay but maximize what we can deliver to our business," Mr. Kunzle said. Using an operating system that runs on a variety of different platforms, the bank can lower its costs. "That gives us the maximum commercial leverage in the marketplace."
He said the project could potentially involve using Sun's outsourced computing grid as a supplement to the investment bank's internal grid, which has been built primarily using software from Platform Computing Inc. of Toronto.
The project is now in the "proof of concept" phase, Mr. Kunzle said.
Joe Marty, the director of financial services at Sun, of Santa Clara, Calif., said, "The financial services business puts the absolute biggest demands on making computers work."
Lauren Bender, a senior analyst at the research and consulting firm Celent Communications LLC of Boston, said in an interview Thursday that the contract is "really a big deal for Sun."
"Sun, for the last several years, has been working on a turnaround" after struggling when the dot-com bubble burst in 2000 and 2001, Ms. Bender said. "At this point, Sun is hungry," and that could lead to noteworthy developments in computing technology.
"They're going to do everything they can to be sure it doesn't go wrong," Ms. Bender said. "That makes a big difference. There's the question of the technology itself, then there's the question of the installation and support. That can make a huge difference."
